New lemon car laws introduced to protect consumers who have bought defective or faulty vehicles
WHEN LIFE GIVES YOU LEMONS
At Potts Lawyers we receive many enquiries about new car buyers buying a lemon car. A “lemon” is a common term for a vehicle that turns out to have several manufacturing defects affecting the safety, value, or utility of that vehicle.
Most Australian states did not previously have ‘lemon laws’. Lemon laws are aimed at protecting consumers against defects in new vehicles, and usually require the manufacturer to repair, replace, or refund the consumer’s vehicle.
Beginning 1 September 2019 the Queensland government finally introduced new lemon laws to protect consumers who purchase defective motor vehicles. The changes came after an inquiry into the matter recommended that consumers need further protections. Almost all other developed countries have had comprehensive lemon laws for decades.
Consumers are now able to make claims in QCAT for defective motor vehicles for up to $100,000 (instead of only $25,000), and some additional warranties now apply for those who purchase motor vehicles over 10 years old or with more than 160,000km on the odometer (30 day/1000 km warranties)
However buyers should still beware: if you purchase a motor vehicle from a private individual that is not a motor dealer, you are not covered and so assume that you are buying on an ‘as is, where is’ basis in those situations, or get advice from a lawyer if you want to get a written contract with the seller which makes additional warranties.
If you are planning on purchasing a pricey vehicle, or if you have bought a vehicle which you think is a lemon, it’s important that you get legal advice immediately.
What is a ‘Lemon’?
A ‘lemon’ is a term usually used to describe a significant defect in a motor vehicle. However the term is more commonly used where a consumer is frustrated with the motor vehicle and the services of the dealer or manufacturer, and where the defect is typically irreparable, or where the dealer has repeatedly failed to repair it.
You may have purchased a ‘lemon’ if your new vehicle:
- Suffers from repeated problems;
- Suffers from problems which persist despite attempts to repair them;
- Has required numerous visits to the dealer or service departments, including obtaining reports from independent repairers and specialists;
- Spends a considerable amount of time off the road for repeated repairs, affecting your ability to enjoy the reliability of and use of the vehicle;
- Requires numerous works under warranty, with some warranties either expiring or being extended.
In many cases, consumers can find themselves in a position where they can get into a civil dispute with their dealer or the manufacturer in relation to the repair, replacement, or refund of monies, associated with the problems listed above.
What if the defect affects the safety of the vehicle?
Usually, consumers will be in a stronger position to demand a repair, replacement, or refund, where a vehicle suffers from a manufacturing defect which affects the safety of that vehicle. In these instances, consumers should stop driving the vehicle and notify the manufacture, car dealer, and the ACCC immediately. In most cases, common defects should be covered by recalls, which should be repaired by the manufacturer without any charge to the consumer.
If it is not a common defect recognised by the manufacturer or the ACCC, consumers should still be entitled to relief, however in many cases we have still seen vehicle manufacturers being reluctant to repair some of these defects.
Problems Associated with Identifying Defects
It is not uncommon for Dealers and Manufacturers to not properly identify defects. In many cases, as a result of the following factors, defects are sometimes identified after the vehicle is out of warranty:
- The source of the problem or issue cannot be identified by the Dealer / Manufacturer;
- The ongoing issue cannot be corrected, leading to the issue persisting after the warranty period;
- The problem or issue not being ‘heard’ or ‘seen’ by the Dealer / Manufacturer when the vehicle is brought in, despite the consumer’s complaints (not being able to ‘replicate’ the issue).
Inadequate Proposals or Resolutions by the Dealer / Manufacturer
In many cases, consumers are dissatisfied with the proposed solutions of the motor dealer or manufacturer.
Examples of inadequate solutions proposed include:
- Small offers of monetary compensation;
- Inferior replacement vehicles;
- Trade-ins (but where the trade in value of the vehicle is very low).
In many cases, no satisfactory offer of repair, refund, or replacement is made altogether.
Australian Consumer Law
Consumers may be entitled to relief under Australian Consumer Law since the ACL applies to consumers who purchase vehicles or trailers, and since Australian Consumer Law has guarantees that apply to these purchases.
Some of these guarantees found within Australian Consumer Law include guarantees that:
- the goods are of acceptable quality;
- the goods are fit for any purpose specified by the supplier;
- the description of the goods is accurate;
- the goods should match the sample (or demonstration model); and
- the manufacturer will take reasonable steps to make spare parts and repair facilities available for a reasonable period after purchase.
Getting Legal Advice
If you have bought a defective new vehicle, and the manufacturer is not cooperative in assisting you with the repair, replacement, or refunding of the purchase price, or if their proposed resolution is completely unreasonable and inadequate: you should seek legal advice as soon as possible.
In circumstances where the vehicle purchased is an expensive luxury vehicle, and where the expectation of quality is higher, buying a lemon can be particularly devastating and costly. Similarly, if the vehicle purchased was for a low income family who cannot afford another vehicle to transport their children, the effects could be devastating on that family’s livelihood.
Potts Lawyers are experienced in assisting consumers who have recently purchased defective goods, including vehicles. In most cases, we can draft correspondence to the relevant motor dealer or the manufacturer, setting out the issues with the vehicle, and any rights you may have under Australian Consumer Law. In many cases, this can result in a positive outcome without the need for court.
It is recommended that you obtain legal advice in relation to defective motor vehicles immediately so that your rights can be protected to the fullest extent possible.